Hewlett-Packard to Cut 1,800 More Jobs

Hewlett-Packard Co. said Wednesday that it would cut 1,800 jobs on top of the 15,000 layoffs planned as part of the acquisition of Compaq Computer Corp. amid persistent weakness in technology spending by consumers and large corporate customers.

The nation’s largest personal computer and printer maker had promised to accelerate cost-cutting efforts last month when it reported declining revenue in most product lines. HP President Michael Capellas said this week that the company would meet its goal of cutting 10,000 jobs by the end of next month, a month earlier than planned.

Other cuts will be completed by the fall of 2003.

About 8,200 jobs will be eliminated from the Hewlett-Packard side of the operation and about 8,600 from the former Compaq by the end of October 2003, the company said.

Hiring will continue in the printer and services operations, a company spokesman said.

HP bought rival Compaq for $18.9 billion--the largest technology merger ever--to boost efficiencies. Since the deal closed in May, technology spending has worsened more than expected, especially corporate spending for information technology.

The two companies had a total 150,000 employees when they merged, and about 6,500 were let go by late August.

In reporting the first results as a combined company Aug. 27, HP cited overall weakness in the technology sector rather than problems with the Compaq acquisition for its disappointing sales.

Revenue of $16.5 billion missed analysts’ expectations of $16.7 billion. The company had a net loss of $2.03 billion in the fiscal third quarter that ended in July, including one-time charges related to the acquisition, job cuts and other restructuring costs.

One bright spot for Hewlett-Packard was its printing and services operations. Sales of printers and accessories rose 10% to $4.7 billion in the third quarter, making up about 28% of total revenue. Revenue from technology services, which was touted as a key rationale for the merger, was down 7% to $3 billion.

On Monday, Hewlett-Packard introduced new printers, digital cameras and other products as part of a $1.2-billion plan announced in June to overhaul its consumer offerings.

In early June, Hewlett-Packard lowered its expectations for sales growth in fiscal 2003 to 7% to 9% from earlier expectations of 8% to 10%.

Shares of Palo Alto-based Hewlett-Packard closed up 55 cents at $12.84 on the New York Stock Exchange.

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Bloomberg News was used in compiling this report.